Pets, Places, & Things, Points on Pets

Is Pet Insurance Right for You?

By Ken Byrer

A counterpart to the joy we get from our fuzzy companions is constant worry about their safety and well-being. In addition to accidents caused from our pets’ curiosity and goofiness such as eating string on the floor or a bone found in the trash can, we also must manage the health of creatures who age much faster than ourselves. Like human medicine, veterinary care can be extremely expensive, given a seemingly endless train of miraculous treatments and drugs. Humans have access to insurance to help fund those miracles when needed – should your pets, too?

A Pawlicy Advisor brief asks what would you do if your dog or cat had an unexpected $5,000 vet bill? It’s a troubling question for many if not most people, who have a median bank balance of not much more than that sum. The group cites a provider saying they have “difficult discussions” every day with pet owners who cannot afford the cost of their animals’ care and asserts that one in three pets will need emergency care each year.

$34.3 billion in medicine and treatment make up about a quarter of the $123.6 billion Americans spent on pets in 2021. In an industry roundup by MarketWatch, more than 90 million Americans have pets, and about 13% of them have pet insurance as of 2022. From 2017 to 2022, insured dogs increased from 1.5 million to 3.25 million, and cats from 290,000 to 727,000. So, more Americans are buying pet insurance. Should you be one of them?

What it is: Pet insurance uses the same familiar terms as other insurance: premiums, co-pays, deductibles, and so forth. It presents the same choices between cost and coverage that concern consumers of health, auto, and life insurance. Available underwriters include national insurance brands like Nationwide and Progressive as well as niche specialists like the ASPCA or big retailers like Costco. Blue Weave Consulting described the market as split into three core categories for dogs, cats, and other animals, with dogs (ahem) leading the pack in coverage “…due to their popularity across the country, higher care costs, and greater risk of accidents…”. As far as policy substance, the industry offers three main kinds of products: accident-only, substantially similar to a “catastrophic” health policy intended to deal with disasters; accident and illness, which expands coverage further into non-routine medical problems; and the catch-all “others,” that can include wellness features such as routine physicals.

Not surprisingly, a number of sites (such as Findinsurance, Pawlicy Advisor, and Forbes, to name only a few) offer web-based comparison shopping. These sites present summaries of a policy’s high points and general contours such as maximum amount covered, reimbursement rates, and deductibles offered. ValuePenguin (part of Lending Tree) presented current pet insurance data as of 2023, citing a $49 average monthly cost for dogs ($588 annually) and $29 for cats ($348 annually). Again, dog insurance runs higher — 69% more expensive than cats for accident and illness policies – due to a higher rate of health issues. Breed affects prices, as does age and location. Further modeling in the same brief identified the features of the most common policy as a $500 deductible, a $5,000 annual maximum payout, and an 80% reimbursement level.

When to Buy: Where consumers have more experience with insurance products aimed at them, pet insurance can mystify newcomers. Pet insurance behaves more like health insurance — purchased as soon as possible — than life insurance, where consumers typically wait until the covered subject ages, according to Pawlicy Advisor. The same group notes that, unlike human health insurance and an enormous consideration in the pet market, no pet insurance covers pre-existing conditions. They therefore recommend buying coverage as part of getting a new pet, ideally protecting puppies and kittens from the time they enter your care so that insurance kicks in before conditions develop and are thus excluded from coverage. A pet with pre-existing conditions can still be insured for any new problems, and some insurance will cover a current condition it defines as “curable” rather than “chronic” and will cover them once they are declared cured by the insurer’s required process. Many insurers require a vet exam prior to approving a policy.

Considerations: Pet and human insurance share many features because insurance is a business. In both cases, the insurer needs to make more from your premiums than it pays for your expenses and uses a variety of means such as caps, co-pays, and exclusions to make sure that happens. Both kinds of providers premise the value of their product on letting consumers pay gradually in anticipation of a large sudden expense, again with maximums and co-pays to protect themselves. That said, coverage can be the only way to deal with a huge unforeseen vet bill.

In both cases, the issue comes down to affordability. Among humans, over 8% remain uninsured (and far more if not counting public insurance). However, an industry group found that  “…85% of dog-owners and 76% of cat-owners think of their pets as family,” which puts the pet insurance question back in the perspective of protecting the health of family members. That framework suggests that if a household can afford coverage, doing so takes concrete steps to preserve the health and happiness of the non-human family members for years to come.

About the Author: Ken Byrer is a writer living in Alexandria, VA. He can be seen walking Loki his flame-point Siamese on his leash around town. (photo courtesy of Ken).

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